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How your claims history affects your car insurance premium

Nov. 14, 2022
3 mins
A black car with front-end damage after a collision

This article has been updated from a previous version.

Many factors determine your auto insurance premium. Just as your driving record is a predictor of what claims you may end up making, your claims history has a great deal of impact on how much your auto insurance costs.

Your claims history gives your insurance provider a hint at what to expect from you as a driver in the future — the good, the bad, and the ugly. Regardless of their nature, claims cost your insurance company money, which is why it will consider your claims history when quoting you for a new policy or renewing your existing one.

Insurance companies must bring in more money than they spend on customers’ claims. If you’ve made a lot of claims as an insured driver, it’s a sign that you could be a money-losing customer, even if you don’t realize it.

Not all auto insurance claims are created equal

Depending on how long you’ve been a licensed driver, you may not even be able to recall your claims history. Although you don’t need to know, it can help when shopping around for car insurance — understanding your claims history will help you avoid sticker shock.

The nature of the claim matters, so if you were involved in a collision and made a claim, you should verify the accuracy of the collision report. Although rare, it’s possible a report may incorrectly state you were at fault, or the report may be tagged as open when it has in fact been closed. Both situations could potentially drive up your premium.

If you have been in a collision, or multiple collisions, you’ll want to remember the dates. Insurance companies will take into consideration how recently you’ve been involved in a collision or made a claim. Whether it’s been two years since the last one or a decade ago, the length of time since you last made a claim will factor into your premium calculations. If your driving history has dramatically improved over time, then you’ll benefit from not being a frequent claimant.

How recently you’ve made a claim can affect your premium, whether you’re moving to a new insurance company or staying with the same one. You should expect to see your rate drop over time and benefit from being a safer driver who hasn’t made a claim in a while.

Claim details matter

How often and how recently you’ve made a claim aren’t the only factors affecting the price of your monthly premium. A lot of other claim-related data is mined to calculate your auto insurance rate.

Insurance companies also consider which people are making the costliest claims, as well as whether a driver’s claim was accepted, denied or withdrawn. Ultimately, the details of the collision can dictate how a claim affects your monthly premium, including who is at fault for the collision, your driving record, and the amount of the claim.

To determine just how much a claim can affect the monthly premium, we used the RATESDOTCA insurance quoter to determine the lowest rate offered to a hypothetical 35-year-old male in Toronto driving a Honda Civic LX. Without any at-fault accidents on his record, the driver's lowest quoted premium is $213 per month, while one at-fault claim made three years ago increases his quote to $406 per month. On the other hand, an at-fault claim six years ago would cost him $272 per month, demonstrating that the more time has passed since the at-fault accident, the less bearing it has on your premium.

Your rate may remain the same if the collision isn’t your fault. Even if you are at fault, a good driving record and a long gap between your last claim will mean there could be little to no change in your premium. Even if the claim does warrant a rate hike, it’s likely your premium won’t go up until your policy is renewed. Most claims will stay on your driving record for three years, so that’s how long you can expect to see any hikes affecting your insurance rate.

Similarly, the insurance company has access to recent events from your driving history over the same three-year period. In addition to any claims, they can access a record of tickets, collisions, convictions, and any driving courses.

How to find affordable car insurance rates — even with a claims history

If you do make a claim that raises your rate, taking additional driver’s education courses can help bring your premium down again. Your insurance company will see it as a precaution that helps reduce your likelihood of being involved in another collision and making a claim.

Another way to reduce your rate is to not make a claim for every single incident. For example, if you got dinged in a shopping mall parking lot while parked, it might be better just to pay for the repairs out of pocket. Conversely, there are things that affect your insurance premium that you can’t control. Even with a spotless driving record and no history of claims, your premiums could still go up every year if you have the misfortune of living somewhere where there are a lot of claims made by other drivers.

If you’re wondering why your premium is jumping on renewal with your existing insurance company or what impacts your auto insurance rate when you go looking for a new provider, always remember that your claims history is in the driver’s seat with you. It also never hurts to shop around, especially if you have an overall good driving record, and no history of major insurance claims. The company that offered you the best rate last year won’t necessarily be the same each year, which is why it’s in your best interest to compare quotes from a variety of providers.


Parameters used for driver quotes:

  • 35-year-old male living in downtown Toronto
  • Single and employed
  • G licence, driving a 2021 financed four-door Honda Civic LX (4WD) purchased this year
  • Uses car for personal use
  • Drives five kilometres daily to and from work (10,000 kilometres annually)
  • Parks in a private driveway
  • Yes to winter tires
  • Insured consistently since 2003, and with his current insurance company for two years
  • Comprehensive and collision coverage
  • No policy cancellations, no time without insurance coverage, and a clean driving record (except when demonstrating the surcharge for an at-fault claim)
  • No discounts selected for UBI, bundling, CAA, or soft credit check

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Gary Hilson

Gary Hilson is a Toronto-based freelance writer who has produced thousands of words for print and pixel about business and technology for a variety of publications and corporate clients. When he’s not tapping on the keyboard, Gary collects comic books, attends live theater, constructs Lego, and buys books he always intends to read.

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